Negative equity risk looms

However, mortgage lender Abbey National said in a trading update that the support of its Spanish owner had helped it win new mortgage business in a shrinking market and attract new deposits from rivals.

Abbey, bought by Santander in 2004, said it had added 1.4 billion pounds in deposits in the third quarter and total inflows in the nine months to the end of September were 70 percent higher than a year earlier.

(Reporting by Peter Griffiths; Lorraine Turner and Sumeet Desai)